Company Presentation for the Second Quarter of Fiscal Year Ending March 31, 2018
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Company Presentation for the Second Quarter of Fiscal Year ending March 31, 2018 This English text is a translation of November 7, 2017 the Japanese original. The Japanese NTT DATA Corporation Original is authoritative. © 2017 NTT DATA Corporation INDEX 1. Results for the Second Quarter of Fiscal Year Ending March 31, 2018 (The whole company basis) 2. Revision of Business Segments 3. Results for the Second Quarter of Fiscal Year Ending March 31, 2018 (By Business Segment) 4. Forecasts of consolidated financial results for Fiscal Year Ending March 31, 2018 by New Business Segment 5. Progress of Mid-term Management Plan 6. Appendices • Business topics • Explanatory details of financial results and forecasts • EPS, EBITDA, ROE, etc. Cautionary Statement Regarding Forward-looking Statements ※ Forecast figures in this document are based on current economic and market conditions. As changes in the global economy and information services market are possible, NTT DATA Group cannot guarantee their accuracy. ※ Services, products, and other names contained within this handout are trademarks, registered or otherwise, of NTT DATA Corporation or other companies. © 2017 NTT DATA Corporation 2 1 Results for the Second Quarter of Fiscal Year Ending March 31, 2018 (The whole company basis) © 2017 NTT DATA Corporation 3 Results for the Second Quarter of Fiscal Year Ending March 31, 2018 ・Steady progress was observed in line with the full-year forecasts led by the robust domestic businesses ・The PMI of the former Dell Services showed steady progress. ((Billions of Yen,%) 2017/3 2nd.Quarter 2018/3 2nd.Quarter YoY YoY Results(Apr.-Sep.) Results(Apr.-Sep.) (Amount) (Rate) New Orders Received 975.6 946.9 -28.7 -2.9% Net Sales 779.6 1,020.9 +241.3 +31.0% Operating Income w/o 53.5 66.7 +13.2 +24.7% goodwill amortization Operating Income 45.3 52.0 +6.7 +14.8% Net income attributable to owners of parent w/o goodwill amortization 37.2 36.5 -0.7 -1.9% Net income attributable to 29.0 21.8 -7.2 -24.8% owners of parent 4 © 2017 NTT DATA Corporation 4 2 Revision of Business Segments © 2017 NTT DATA Corporation 5 Outline of the Revision of Business Segments Former Business Segments New Business Segments (~June 30,2017) (July 1,2017~) Public & Social Public & Social Infrastructure Infrastructure Disclosure segments Disclosure segments Disclosure Financial Financial Enterprise & Solutions Enterprise & Solutions North America Global EMEA & LATAM China & APAC (Others) 6 © 2017 NTT DATA Corporation 6 3 Results for the Second Quarter of Fiscal Year Ending March 31, 2018 (By Business Segment) © 2017 NTT DATA Corporation 7 New Orders Received: YoY Changes by Business Segment (from 2Q FYE3/2017 to 2Q FYE3/2018) (Billions of yen) +41.5 -160.9 975.6 +23.9 946.9 Public & +60.8 Social Others Infrastructure EMEA & +4.7 LATAM Financial Enterprise & North Solutions America 2017/3 2nd. Quarter 2018/3 2nd. Quarter Results (Apr.-Sep.) Results (Apr.-Sep.) Public & Social Infrastructure Increased principally as a result of winning large-scale projects for government ministries. Decreased due mainly to a reactionary decline in large-scale projects for banks and cooperative financial institutions in Financial the previous fiscal year. Increased due mainly to growth in the digital-related businesses including M&A in the previous fiscal year as well as Enterprise & Solutions SAP business. Increased mainly reflecting the expansion of businesses as a result of the acquisition of the former Dell Services and North America the temporary increase in months to be consolidated associated with the unification of accounting periods of the Group companies despite a reactionary decline in large scale projects in the previous fiscal year. Increased due to the temporary increase in months to be consolidated associated with the unification of accounting EMEA & LATAM periods of some Group companies. 8 © 2017 NTT DATA Corporation 8 Net Sales: YoY Changes by Business Segment (from 2Q FYE3/2017 to 2Q FYE3/2018) (Billions of yen) +42.1 1,020.9 +176.2 Others EMEA & LATAM 779.6 -3.7 +12.8 +18.0 North Public & Financial Enterprise & Social Solutions America Infrastructure 2017/3 2nd. Quarter 2018/3 2nd. Quarter Results (Apr.-Sep.) Results (Apr.-Sep.) Public & Social Infrastructure Decreased due mainly to a reactionary decline of the services for the utility industry in the previous fiscal year. Financial Increased mainly reflecting the expansion of businesses for banks. Increased due mainly to growth in the businesses for the manufacturing industry in addition to the expansion of digital- Enterprise & Solutions related businesses including M&A in the previous fiscal year. Increased mainly reflecting the expansion of businesses as a result of the acquisition of the former Dell Services and North America the increase in months to be consolidated associated with the unification of accounting periods of the Group companies. Increased due to the increase in months to be consolidated associated with the unification of accounting periods of EMEA & LATAM some Group companies, and the growth in businesses in Spain and Germany. 9 © 2017 NTT DATA Corporation 9 Operating Income w/o Goodwill Amortization: YoY Changes by Business Segment (from 2Q FYE3/2017 to 2Q FYE3/2018) (Billions of yen) +6.8 -1.0 66.7 +5.4 EMEA & Others LATAM +6.2 North 53.5 America -3.2 Enterprise & Solutions Public & Financial Social Infrastructure 2017/3 2nd. Quarter 2018/3 2nd. Quarter Results (Apr.-Sep.) Results (Apr.-Sep.) Public & Social Infrastructure Decreased due mainly to a decline of sales. Financial Increased reflecting growth in sales and the improvement in cost of sales ratio mainly attributable to a decrease in depreciation of some systems. Enterprise & Solutions Increased due mainly to growth in sales. Increased due to contribution by the acquisition of the former Dell Services, and the increase in months to be North America consolidated associated with the unification of accounting periods of the Group companies. Decreased mainly reflecting a temporary decline in profitability despite a growth in earnings due to the increase in EMEA & LATAM months to be consolidated associated with the unification of accounting periods of some Group companies. 10 © 2017 NTT DATA Corporation 10 Public & Social Infrastructure (from 2Q FYE3/2017 to 2Q FYE3/2018) (Billions of Yen,%) 2017/3 2nd. Quarter 2018/3 2nd. Quarter YoY YoY Results (Apr.-Sep.) Results (Apr.-Sep.) (Amount) (Rate) New Orders 178.9 220.4 +41.5 +23.2% Received Net Sales 186.7 183.0 -3.7 -2.0% Operating 14.5 11.2 -3.2 -22.5% Income Segment Profit(*) 14.8 11.5 -3.2 -21.9% (*)Segment Profit is income before income taxes New orders received Increased principally as a result of winning large-scale projects for government ministries. Net sales Decreased due mainly to a reactionary decline of the services for the utility industry in the previous fiscal year. Operating income Decreased due mainly to a decline of sales. 11 © 2017 NTT DATA Corporation 11 Financial (from 2Q FYE3/2017 to 2Q FYE3/2018) (Billions of Yen,%) 2017/3 2nd. Quarter 2018/3 2nd. Quarter YoY YoY Results (Apr.-Sep.) Results (Apr.-Sep.) (Amount) (Rate) New Orders 326.5 165.6 -160.9 -49.3% Received Net Sales 246.3 259.1 +12.8 +5.2% Operating 16.7 22.9 +6.2 +37.6% Income Segment Profit(*) 17.0 23.2 +6.1 +36.2% (*)Segment Profit is income before income taxes New orders received Decreased due mainly to a reactionary decline in large-scale projects for banks and cooperative financial institutions in the previous fiscal year. Net sales Increased mainly reflecting the expansion of businesses for banks. Operating income Increased reflecting growth in sales and the improvement in cost of sales ratio mainly attributable to a decrease in depreciation of some systems. 12 © 2017 NTT DATA Corporation 12 Enterprise & Solutions (from 2Q FYE3/2017 to 2Q FYE3/2018) (Billions of Yen,%) 2017/3 2nd. Quarter 2018/3 2nd. Quarter YoY YoY Results (Apr.-Sep.) Results (Apr.-Sep.) (Amount) (Rate) New Orders 127.8 132.5 +4.7 +3.7% Received Net Sales 200.9 219.0 +18.0 +9.0% Operating 15.4 20.8 +5.3 +34.9% Income Segment Profit(*) 31.3 21.4 -9.8 -31.4% (*)Segment Profit is income before income taxes New orders received Increased due mainly to growth in the digital-related businesses including M&A in the previous fiscal year as well as SAP business. Net sales Increased due mainly to growth in the businesses for the manufacturing industry in addition to the expansion of digital-related businesses including M&A in the previous fiscal year. Operating income Increased due mainly to growth in sales. Segment Profit Decreased due to the impact of gains on sale of investment securities in the previous fiscal year despite an increase in operating income. 13 © 2017 NTT DATA Corporation 13 North America (from 2Q FYE3/2017 to 2Q FYE3/2018) (Billions of Yen,%) 2017/3 2nd. Quarter 2018/3 2nd. Quarter YoY YoY Results (Apr.-Sep.) Results (Apr.-Sep.) (Amount) (Rate) New Orders 159.3 220.2 +60.8 +38.2% Received Net Sales 87.0 263.2 +176.2 +202.6% EBITA(*1) 5.7 15.1 +9.3 +162.4% (6.6%*3) (5.8%*3) Operating Income w/o 6.8 goodwill amortization 2.9 9.7 + +234.1% Operating Income -0.6 -0.8 -0.2 -40.6% Segment Profit(*2) -2.7 -9.0 -6.3 -231.3% (*1) EBITA = Operating income + Amortization of goodwill and intangible assets subject to purchase price allocation (PPA) arising from acquisition and others. (*2) Segment profit indicates Earnings b/f income taxes (*3) EBITA margin (EBITA to net sales ratio) Increased mainly reflecting the expansion of businesses as a result of the acquisition of the former Dell Services and the temporary increase in New orders months to be consolidated associated with the unification of accounting periods of the Group companies despite a reactionary decline in large received scale projects in the previous fiscal year.